In the early days of August 2023, experts in the realm of exchange-traded funds (ETFs) at Bloomberg, namely Eric Balchunas and James Seyffart, deliberated over the prospects of a spot bitcoin ETF obtaining regulatory approval. Their initial assessment tilted toward a moderately optimistic 65% likelihood. Yet, as the final days of August unfold and cast their shadows, the duo's stance has encountered a notable transformation. This shift in perspective has been significantly influenced by a decisive legal verdict in favor of Grayscale, an influential cryptocurrency asset management entity, in their legal tiff against the United States Securities and Exchange Commission (SEC). The culmination of these events has led Balchunas and Seyffart to recalibrate their prognostications, elevating the odds to a revised estimate of 75%.
Subject to unforeseen impediments, the United States Securities and Exchange Commission (SEC) stands at the brink of deliberating upon seven discrete proposals, each vying for approval to establish a spot bitcoin ETF. The contenders in this venture comprise distinguished names such as Blackrock, Wisdomtree, Valkyrie, Fidelity, Vaneck, Bitwise, and Invesco. Balchunas, renowned in the capacity of Bloomberg's senior ETF analyst, communicated that both his perspective and Seyffart's have experienced a pronounced adjustment, deviating from their preliminary anticipations.
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| Image shared by Bloomberg’s senior ETF analyst Eric Balchunas. |
Publicly sharing his insights via the social media conduit X (previously recognized as Twitter), Balchunas articulated, "James Seyffart and I are allocating a higher probability of 75% for the introduction of spot bitcoin ETFs within this year, and a subsequent elevation to 95% by the culmination of 2024." Balchunas underscored that their earlier calculations did factor in Grayscale's triumph, but the magnitude of unity and definitiveness emanating from the court's ruling far exceeded their expectations. Consequently, this has constrained the SEC into a position of limited maneuverability, as astutely noted by Elliot Z. Stein. The ETF analyst supplemented his analysis with the following observation:
"Beyond the legal setback, there exists the supplementary repercussion of a public relations setback, a facet of paramount significance as it shapes prevailing narratives and influences perspectives. Notably, this development received extensive coverage across mainstream media outlets, including but not limited to The New York Times, The Wall Street Journal, CNN, the Associated Press, ABC, and a myriad of others. Our assessment posits that the combined impact of the legal and public relations debacles will render a denial politically unviable."
The views espoused by these ETF authorities bear relevance to a recent ruling within the domain of the District of Columbia, where the scales tipped in favor of Grayscale, the premier custodian of cryptocurrency assets. This victory transpired in the context of Grayscale's legal contest against the SEC's refusal to facilitate the transition of the Grayscale Bitcoin Trust (GBTC) into a formally recognized spot bitcoin ETF. Balchunas acknowledged that the current judicial stance could prompt the SEC to contemplate a deferral strategy. Nevertheless, he avers that the precise temporal dimension might possess lesser weightage. A more plausible scenario envisions a forthcoming dawn where news emerges of the SEC relinquishing its reservations, thereby heralding an imminent initiation of ETF operations.
